Tate & Lyle reports third consecutive strong quarter

Food ingredients manufacturer Tate & Lyle expects to exceed its targets for the full financial year, according to its latest financial update for the three months to December 31.  

While the firm did not release any figures in the update, it did report performance ahead of the same period last year.

Tate & Lyle said its speciality food ingredients division performed in line with its expectations, excluding its “food systems” and sucralose businesses. It saw profits rise even as underlying volume was flat. US sales volumes fell, but were stable in Europe, the Middle East and Africa.

Food Systems profit continued to be held back by lower volume, while sweetener profits was ahead of the comparative period last year.

The bulk ingredients division’s profit was ahead of the company’s expectations and was expected to deliver “modest margin gains in the fourth quarter”.

‘Ahead of our expectations’

The statement said: “Encouraged by performance in the quarter, we now expect the group’s performance in constant currency for the full year to be modestly ahead of our expectations at the time of our half-year results in November 2016.”

Tate & Lyle raised its profit expectations for the year in its half-year results, after its saw a 22% rise in profit before tax. The Brexit vote and a weakened pound had also been favourable for the company.

In its November statement, Tate & Lyle said: “The group generates less than 2% of its revenues in the UK, with most revenues being US dollar-based.

‘Most revenues being US dollar based’

“The outcome of this referendum is not expected to have a material near-term impact on our business and we are well-placed to continue to grow our global business without significant disruption.”

The company campaigned for Brexit, writing to its 800 workers about the benefits of leaving the EU.

Vice president Gerald Mason argued that EU membership had inflated the firm’s costs. The EU sugar regime had pushed up the business’s raw material costs by nearly €40M alone, he claimed.